Tag Archives: Replicable

How Do You Shift a Key Employee to Manager? – Pt 2 Three Points

Situation: A CEO wants to promote a key employee from rainmaker to manager. This will not involve a change in expectations or metrics for either the new manager or the employees who will report to her. However, there needs to be more forcefulness and clarity on what needs to be accomplished, both for the new manager and her team. How do you shift a key employee from rainmaker to manager?

Advice from the CEOs:

  • Don’t just measure calls. Measure the outcome from calls. Develop an objective and a metric or set of metrics that they can run to. Link their activity to business results. They will respond because they will be able to impact the firm as well as their careers.
    • Tie individuals’ metrics to the business culture that the management team is creating and create win-win links.
  • What is involved in changing the business focus to new markets?
    • Build a replicable system for servicing a particular channel. Use the lessons from this exercise to build systems for new channels. As the team moves into new channels, tweak the replicable system so that it responds to the specific demands of that channel.
    • For new channels, identify the most important needs of the new customer – from their perspective – and develop a client service model to meet this need. For example, if the goal is to develop an investment service for foundations and endowments, the key variables may be acceptable return with a high degree of safety. Tailor an investment portfolio, as well as a client service strategy to meet the most important needs of this sector.
  • What is involved in creating a smooth hand-off within client relationships?
    • Start bringing in others to whom will be handed off the relationship as early in the client relationship development process as possible. Allow rapport and trust to develop, and prep the client for the expectation that a smooth hand-off is part of the ongoing client relationship.

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How Do You Maximize Shareholder Value and Liquidity? Four Factors

Situation: A private company creates a liquidity event every 3-5 years: selling pieces of the company, product-based spin-offs, or potentially the whole company. Most frequently, engineering efforts spin off opportunities for new product-based companies. How do you measure company or business valuation with the objective of maximizing shareholder value and liquidity?

Advice from the CEOs:

  • Look at a model to create productized service offerings that are replicable and predictable. This can create a stream of spin-offs to generate ongoing liquidity events. Jack Stack’s company, Springfield Remanufacturing has done this very effectively over the past two decades. He describes his methods in The Great Game of Business.
  • Regarding selling the whole company, the most important measure is strong company performance in recent quarters. Focus on internal metrics as well as revenue and profitability performance. Put together a solid 3 to 4 quarters of profitability with an upward trend to increase appeal to potential acquirers. The current market requires both a longer history of profitable performance and more data points of performance than was required in the previous decades.
  • To compliment internal measures develop a relationship with a business broker who can help you assess the value of either product or company spin-offs. A broker can determine the current value of the opportunity as well as a timeline and critical actions to enhance opportunity value.
  • Consider a roll-up of your company and one or more of your business partners.
    • Look for similar or compatible financial structures and complimentary capabilities.
    • A roll-up can broaden your range of products and services. As a bigger entity you have more options, and can enhance your ability either to generate spin-offs or become a more interesting acquisition candidate.
    • The downside is the time that it takes to complete the roll-up if you feel you have a short window of opportunity.

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